What comes to mind when you hear the term "estate planning?"
If you're like many people, you know it has something to do with having a will. You’d also be correct if you said it involves making certain other types of end-of-life arrangements. A good estate plan goes further and takes into account your current financial and tax objectives, as well as how to thrive in the years to come. Consider this definition:
Caring for yourself, your loved ones and your assets while you are living, and providing for the transfer of assets to other persons and entities – both during your life and afterwards.
Why have an estate plan?
Very few people wake up in the morning and wish they could spend the day working with their attorney to create an ‘estate plan.’ However creating (or updating) a plan is among the most important things you can do. When you do, you:
By planning, you also make things easier for your family. If something happens to you, it will be a very difficult time for your family members and other loved ones. How wonderful it would be if they knew exactly what you wanted to have happen and have the means at hand to follow your wishes. Consider the planning you do now to be your final future gift to your loved ones.
While estate planning can entail some difficult choices, it does provide a sense of relief and peace of mind when it is done. You’ll know that you have done your best to plan and provide for yourself, your loved ones and the causes you’ve cared about during your lifetime. There is great satisfaction in knowing what your legacy will be.
The Key Elements of an Estate Plan
Related to your final wishes
Typically, if a living trust is recommended your estate planning lawyer will also suggest a will as a backup document, to transfer any assets that weren’t included in your trust at the time of your death.
Provide for physical or mental incapacity
Managing and distributing your wealth
You might conceive of the estate planning process as constructing a pyramid from the ground up. Primarily, you want to do what you can to ensure your own well-being. In so doing, keep in mind that it's not selfish to look out for yourself! Only by meeting your own needs now and in the future are you able to build the next level of the pyramid.
If you’re fortunate enough to accomplish some important basics, you’re then in a position to provide for family members and other loved ones. Thereafter, if you have the desire and the means, it becomes appropriate to think about a legacy you can leave for causes dear to you in addition to family and friends.
We hope that you will consider arranging a gift to Trinity when you set up (or update) your estate plan. We realize that we will never replace family members and other loved ones in your plans, nor would we want to. Part of your planning process is to consider how much to leave to individual heirs; what remains can be used to fulfill your charitable aspirations.
How much to leave to children and grandchildren is a judgment call. Some parents transfer as much of their estates as possible to heirs. Others fear that transferring too much wealth may discourage productivity and undermine self-motivation. As Warren Buffet famously said, the perfect amount to leave children is ''enough money so that they would feel they could do anything, but not so much that they could do nothing." Still others realize that the community and world they leave to their children and grandchildren is also part of their legacy. Including Trinity and other charities in your estate plan is a powerful statement about your values, and demonstrates the important role these institutions played in your life.
If you would like to support Trinity through your will or living trust, click here for sample bequest wording you can share with your attorney. Or consider a gift by beneficiary designation also known as a "bequest substitute". It has many of the same advantages as a bequest while being among the most tax-wise ways to give.